Oil Jumps 1% as Dollar Weakens Despite Tariff Concerns

Oil Prices Rise Supported by Weakened U.S. Dollar Despite Global Economic Concerns

Oil prices rose in trading on Wednesday, supported by a weaker U.S. dollar, although the gains remained limited due to growing concerns about a slowdown in the U.S. economy and the impact of tariffs on global economic growth.

By 11:09 AM GMT, Brent crude futures rose by 63 cents, or 0.92%, to $70.20 per barrel. Similarly, U.S. crude futures increased by 1%, reaching $66.91 per barrel.

Weakened U.S. Dollar Supports Oil Prices

Giovanni Stano, an analyst at UBS, explained that oil prices received support in recent days from the weakening U.S. dollar, as well as the U.S. Energy Information Administration revising its outlook on the oil supply glut, moving away from earlier forecasts of a significant surplus this year.

The U.S. dollar index fell 0.5%, reaching its lowest level since the beginning of 2025, which helped boost oil prices by making crude cheaper for buyers using other currencies.

Global Economic Slowdown Concerns Continue to Impact Markets

Priyanka Sachdeva, Senior Market Analyst at Philip Nova, noted, “The decline in the dollar offsets the negative impact of concerns over a global economic slowdown, although this support may be short-lived.”

Meanwhile, U.S. stocks continued to decline on Tuesday, adding to the largest selling wave seen in months. The increase in tariffs on imports and a decline in consumer confidence have raised concerns among investors.

Impact of Tariffs on the Global Economy

President Donald Trump’s economic policies remain focused on imposing a series of tariffs, some of which have already been implemented, while others are delayed or set to take effect soon. Markets fear these tariffs may lead to higher production costs, rising inflation, and a decline in consumer confidence, potentially impacting economic growth.

Awaiting U.S. Inflation Data and Market Outlook

Investors are awaiting U.S. inflation data set to be released on Wednesday for clues on the future direction of interest rates. The market is also monitoring the OPEC+ alliance’s plans to increase production starting in April.

U.S. Oil Production and Stockpiles

Regarding supply, the U.S. Energy Information Administration reported that U.S. crude oil production is expected to hit a new record this year, averaging 13.61 million barrels per day, surpassing previous estimates. At the same time, U.S. crude oil inventories rose by 4.2 million barrels during the week ending March 7, 2025, while gasoline inventories fell by 4.6 million barrels, according to data from the American Petroleum Institute.

Traders are waiting for official U.S. government data on inventories later today for more indications on market trends.

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Sources:

• Data from the U.S. Energy Information Administration
• American Petroleum Institute reports
• Analyst comments from UBS and Philip Nova